Question : Which of the following statements is true?
Option 1: Goodwill, if existing in the books, is written off by debiting all Partners (including Deceased Partner) Capital Accounts.
Option 2: Deceased Partner’s Capital Account is credited with his share in Goodwill as valued on the date of his death.
Option 3: Both 1 and 2
Option 4: Neither 1 Nor 2
Correct Answer: Both 1 and 2
Solution : Answer = Both 1 and 2
Goodwill is typically written off by debiting all partners' capital accounts, including the deceased partner's. Additionally, the deceased partner's capital account is credited with their share of goodwill as valued on the date of their death, ensuring a fair distribution of assets.
Hence, the correct option is 3.
